Street Based Retailing Fossilisation or Revolution ICTC2013 - 16 October 2013
Fossilisation • • •
Preserved remains or traces of animals, plants, and other organisms from the remote past Becoming inflexible or out of date Basically in the case of some retail – no longer exists
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Sustainable?
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Fossilisation
Revolution • • •
Revolution is a fundamental change that takes place in a relatively short period of time Historically political More recently used to denote great changes outside the political sphere. Such revolutions are usually recognized as having transformed in society, culture, philosophy and technology.
Why Fossilised? • Could not/would not adapt
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For lease
Adapting to change • • •
Relevance to survive in changing times Major shifts in the market and consumer expectations and purchasing habits Re-evaluation of the business model and product lines
Adapted? • • • •
Boeing in 1933 predicted that there would never be a plane built bigger than its 10 seater The Royal Society in 1800 stated that Xrays would be nothing more than a hoax Bill Gates stated once that 640kilobytes ought to be enough for anyone Research in Motion • 2009 Forbes fastest growing company in the world • Today?
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Mobile phones
Revolution in Retail Changes in how we merchandise and shop •
Great Fire of London – 1666
• City rebuilt • Separation of vehicles from pedestrians • Sidewalks/window displays •
Burlington Arcade in London (1819) & Le Bon Marche Paris (1864)
• • • •
Enclosed glass roof arcade Safe Cinemas Created the retail environment as a place of destination
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Burlington Arcade
Why is the change driver missed Doug Stevens – “The Retail Revival” • Fear • Arrogance • Distraction • Apathy • Wilful ignorance • Lack of imagination • Linear VS exponential thinking • Leadership paradox • Old DNA • Rationalisation
Changing times in street based retail • •
Change is inevitable and we must accept and adapt Traditional models changing due to • Changing consumer habits • Retail paired with other experiences • Fundamental change in economics of place • Traditional - cluster retail in one place and sum greater than the parts • Future - less reliance on space to show retail/greater use of technology to showcase product/connection with customers/entertaining
On line retailing NAB Online Retail Sales Index • 2011 - online retail spending at $10.5 billion or 4.9% of retail sales • 2012 - online retail spending at $11.7 billion or 5.3% of retail sales • 2013 - online retail spending at $14.1 billion or 6.3% of retail sales
UK Trend Centre for Retail Research • Since 2007 • 231 retailers no longer trading • 23,284 stores have closed • 209,127 jobs lost
Australian Trend • Statistics not known • However we no longer have high street stores including Borders, Virgin Megastore, HMV etc. • Significant for lease signs in high streets of Oxford Street in Paddington, Rokeby Road in Subiaco and Chapel Street in South Yarra shows signs of vanishing stores
Why • • • • • •
Changes in consumer behaviour High rents – forces out retailers and brings in personal services Displacement of retail to services creates unpeopled environment Reduced experience for shoppers Reduced foot traffic for retailers Reduced local retailers and increased national chains
Local or Not? The concern of a few years ago of the trend on high streets of a move from local retailers to national chains has been tested by James Brown in his publication "The Future of High Streets�. In that, he found that many people in the UK preferred a full town centre rather than worrying about whether the shops were local or not.
Characteristics of street based retailing Defined demographics • Socio-economic • Ethnicity • Age Two categories • Convenience based • Demographic based
Categories of street based retailing Convenience based • Focused on car use • Usually grocery based • Divergence from normal journey to collect essentials • Sized in terms of catchments and competition • Function and efficient providers of essential services/products • Based on transit and function • Customers not connected to them as a place
Categories of street based retailing Experience based • Grocery not necessarily the driver • Eating, socialising – being entertained • Wider than immediate community • Often local ownership • Loyalty, connection and a sense of place
Experience based example Queen Street, Croyden • Gentrified over past 15 years • Previously a redundant retail strip from the 50’s • No supermarket • 50/60’s furniture, home wares, fashion, cafes , restaurants, bakery • Adjacent to train station and arterial road
Place based retail • • • • • •
Old, redeveloped and newly developed Open, landscaped main street Civic spaces Lifestyle activities Cafes, restaurants, bars Residential/short stay accommodation
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Knox City, Victoria
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Rokeby Road, Subiaco
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The Walk, Rokeby Road, Subiaco
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Alfresco dining
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Moseley Square, South Australia
Experience recreation Can we recreate it in a new environment? • Yes – subject to economics and location
James Street Market in Brisbane • Successfully mixes food and community engagement in a new development
Multi-channel retailing strategy Offers customers a choice of ways to buy products: • Purchases from a store • Purchases from a website • Telephone ordering • Mail orders • Interactive television • Catalogue ordering • Comparison shopping sites. Aim is to maximize revenue and loyalty by offering customers choice and convenience.
Multi-channel retailing Technology in Retail Hub in the UK found: • 77% of shoppers said they chose the store they made their last non grocery purchase however only 51 % were committed to returning there for next purchase. 45% were unsure if they would shop next online or at a store • They also found that shoppers were seeking a higher level of personalisation in their interactions with retailers.
Examples of revolution Friendlies Chemist Subiaco • Falling foot traffic and changing consumer behaviour • Broadening of services • Allied health • Developed a GP Clinic on first level
• Increased foot traffic • Destination store
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Friendlies Chemist, Subiaco
Examples of revolution Table Culture Subiaco • Falling foot traffic and changing consumer behaviour • Multi-channel retailing • Use of electronic marketing and on line sales • In store presentations to demonstrate end use of products • Increased foot traffic • Destination store
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Table Culture, Subiaco
Business Role • • • • • •
Identify and monitor trends in consumer needs/behaviour Identify the aspects of multi-channel retailing that work for you Embrace the changes in technology and consumer behaviour to ensure relevance and sustainability Work with local government to create a sense of place and experience for residents and visitors Provide a memorable experience for customers Pop up shops within a retailer cross promotion
Local Government role • • • • • •
Understand the changing nature of the retail and hospitality sector Work with business to create a sense of place and experience for residents and visitors Ensure planning guidelines reflect changing demands and needs in terms of zoning, flexibility of use etc. Encourage and support inner city living with effective planning guidelines Encourage pop up shops where existing premises do not have tenants – retail, bars during festivals Virtual shops
Revolution over Fossilisation - How • • • • • • •
Overcome barriers to change Adapt to change and embrace the future Retailers are responsible for their own future Retailers and Local Government working together to create new concepts and community experience’s Create places where the public can connect and have an experience Retail means more than shopping Commitment at all levels
Thank you & Questions